Release Of Incomplete 2017 FBO Data an ‘Irresponsible’ Attempt To Hide True State of Economy

Opposition Leader Patrick Pruaitch, said today PNG Treasurer Charles Abel has been “naive and irresponsible” in his premature release of alleged details of the 2017 Final Budget Outcome.

Mr. Pruaitch said: “Key officers at the Department of Treasury have a challenging task to put together accurate data for the Final Budget Outcome, a task that keeps them engaged almost up to the March 30th deadline.

“By releasing data about six weeks ahead of their final compilation, the Treasurer is once again promoting ‘mythical’ data, as I warned previously, and is undermining the integrity and honest efforts of his departmental staff.”

The Opposition Leader said that when the former National Alliance Government framed the Fiscal Responsibility Act a decade ago, it put in place a world best practice regime that provided a high-level of transparency in PNG’s budgetary processes.

Mr. Pruaitch questioned how Treasurer Abel expected to correct the falsehoods he is creating by prematurely releasing figures that can already be shown to be highly inaccurate.

“This is a naive and irresponsible act in line with the O’Neill-Abel Government’s efforts to hide the true state of the economy and the irreparable damage that is being done through mismanagement of the economy,” he said.

Mr. Pruaitch said that when the Department of Treasury officially releases its final FBO figures there is certain to be major upward revisions of expenditure estimates because expenditure items have yet to be fully accounted for, and will result in a larger deficit than the numbers produced by the Treasurer.

“Official Government data shows that in the nine months to September last year expenditure was running at 16.3% more than the same period in 2016 with recurrent expenditure up 23% at K6.9 billion.

“Yet the Treasurer claimed that at the end of 2017 recurrent expenditure was ‘lower than the 2016 budget by K647 million.’

“What is happening is that the National Government is squeezing Provincial Governments expenditure by stealth while spending by National Departments is growing out of control.

“Recurrent spending by National Government departments grew by 40.2% to K3.8 billion in the first nine months last year, while expenditure for Provincial Governments was slashed to K1.6 billion from K2 billion in the corresponding nine-month period in 2016.”

… Total public debt stood at K23.5 billion at the end of 2017 when official figures for public debt show they already amounted to K23.9 billion in September 2017.

Mr. Pruaitch said the blowout in recurrent National Government expenditure is proof that the claims of the Treasurer that the O’Neill-Abel Government is exercising “fiscal discipline” is a myth, part of its fake news agenda.

“There seems to be a certain amount of creative accounting underway because the National Government and the Central Bank are claiming that in the past year over K1 billion of external debt has been repaid while the budget deficit has fallen from K3.08 billion in 2016 to K1.7 billion last year.

“According to figures tabled by Mr. Abel, total public debt stood at K23.5 billion at the end of 2017 when official figures for public debt show they already amounted to K23.9 billion in September 2017.”

Resource company tax is grossly underestimated

Mr Pruaitch said the Treasurer’s mythical data on Government expenditure will also be reflected in revenue statistics, where a turnaround in commodity prices is contributing a significant boost to Government revenue.

He said: “In misleading the Parliament with fake FBO data, Mr. Abel has grossly underestimated tax revenue that should be collected by the Internal Revenue Commission from the resources sector.

“Mr. Abel said corporate tax paid by the entire mining and petroleum sector would only amount to K114 million in 2017. We know this is totally fictitious because Oil Search has announced that its company tax has more than doubled to US$138.8 million or K442 million.

“With taxes paid by Oil Search alone more than three times the Government revenue estimate, there is every likelihood tax paid by resource companies, particularly Oil Search, Ok Tedi and Porgera, will reach near record levels of K800-900 million.”